Charlie Wilson is portfolio manager for Thornburg Investment Management. He joined the firm in 2012 as ­associate portfolio ­manager and was promoted to portfolio manager in 2014.

Charlie earned a BS in geology from the University of Arizona in Tucson and a PhD in geophysics from the University of Colorado in Boulder. Prior to joining Thornburg, Charlie served as co-portfolio manager for Marsico Capital Management in Denver, Colorado. He was responsible for portfolio investments across multiple strategies and geographies, with specialization in materials, energy, technology, and payments sectors.

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Charles Roth is global markets editor for Thornburg Investment Management. Prior to joining Thornburg in 2013, Charles was an assistant managing editor at Dow Jones Newswires, the Wall Street Journal’s real-time financial news and analysis division, where he oversaw its bureaus in Latin America as well as the New York–based emerging markets group. He had previously served as a senior writer in the emerging markets group, bureau chief in Venezuela, and staff reporter in Malaysia.

Charles earned BA degrees from the University of Colorado at Boulder and an MA from the Instituto Universitario de Desarrollo y Cooperación at the Universidad Complutense in Madrid, Spain. He was a Peace Corps volunteer in Mali.

The long-expected rebalancing in oil market supply and demand just got postponed again, as forecasts it would take place in the current quarter and then in the last leg of 2016 are now proving premature. The International Energy Agency (IEA) in its September report pushed the ETA on energy market equilibrium well into next year. An unexpected slump in demand growth has been met with sturdy output. “As a result, supply will continue to outpace demand at least through the first half of next year,” IEA said, adding that global oil inventories in July “smashed” to a new record high of 3.1 billion barrels.

Saudi Arabia

Providing the energy market is driven by economic fundamentals more than major central bank monetary policy, current market dynamics should put a near-term lid on oil prices, which are still less than half their highs from mid-2014, even if they have bounced more than 50% off their February lows.

On the supply side, U.S. onshore breakeven price levels have continued to fall thanks to efficiency gains and deflation in services costs. The combination has allowed some U.S. producers to restart production with oil trading not much below $50 a barrel, retarding the market rebalancing. Top producers in the Organization of Petroleum Exporting Countries (OPEC), namely Saudi Arabia, Kuwait, the United Arab Emirates and Iraq have lately been producing “at or near all-time highs, while Iran’s post-sanctions ramp up has been swift,” said the IEA, an association of advanced country energy consumers. After being overtaken by the U.S. as the world’s top oil producer in 2014, Saudi Arabia in May this year reclaimed the title, as some 460,000 barrels per day (b/d) in higher-cost U.S. shale production was shut in, while Saudi Arabia pumped 400,000 b/d more from its low-cost fields, keeping its total output at a near-record high of 10.6 million b/d in August. Total U.S. crude production in June, the most recent monthly data available, stood at a still substantial 8.7 million b/d, albeit down 190,000 b/d from May and 615,000 b/d from a year earlier. Global oil supply ebbed 300,000 b/d from a year ago to 96.9 million b/d in August.

But demand is the bigger story. The IEA cut 100,000 b/d off its global oil consumption forecast for 2016 and now expects demand growth to amount to 1.3 million b/d. It also shaved 200,000 barrels off its projection for 2017, when it sees consumption growing 1.2 million b/d. A sharp decline in this year’s third-quarter demand growth has driven those downward revisions: consumption growth in the three months ended September 30 totaled 800,000 b/d from the year before, down sharply from 1.6 million b/d in the first quarter and 1.4 million b/d in the second.

Although an excess of refined product inventories contributed to flagging crude oil consumption growth, demand from China, India and Europe softened considerably. Apart from China’s economic rebalancing from investment-led to consumption-driven economic growth, it temporarily shut in industrial production and crimped traffic flows to reduce air pollution ahead of the recent G-20 leaders summit. Extensive summer flooding has also dampened China’s oil consumption. India’s heavy monsoon rains, though an economic relief after a few previous years of subpar rains, also undercut the country’s third-quarter oil consumption. Oil demand from Europe’s industrial sector has proved more anemic than expected.

Oil market bulls shouldn’t bet the farm that the oil price overhangs will lift anytime soon. Although the IEA is looking for supply and demand to balance in the fourth quarter of next year, the world in the interim will add another 150 million to 200 million barrels of oil to current inventories. The rebalance remains in the hands of the producers—in particular U.S. onshore producers and Saudi Arabia. While U.S. production has declined nearly 1 million b/d since the peak in 2015, and Nigeria’s output recently fell around 400,000 b/d from the year before, the declines have been largely offset by increasing production from Saudi Arabia and other OPEC members. Saudi Arabia is on a path to increase production about 600,000 b/d in the last quarter of the year from end 2015. Iran, meanwhile, increased its output 750,000 b/d in August from the year-earlier month. According to the IEA, Saudi Arabia can push sustainable production to 12.2 million b/d, which implies the ability to bring on another 1.6 million b/d without too much effort. This remains in dispute. What isn’t debatable is that the worst of the U.S. declines are behind us, as U.S. rig count is now rebounding and global oil inventories continue to grow.

This is not good for oil prices or oil company equities, which are pricing in oil at $60 to $75 per barrel. Downward earnings revisions for oil services companies are also likely under this latest shift to a “lower-for-longer” oil price outlook.

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Charles Roth is global markets editor for Thornburg Investment Management. Prior to joining Thornburg in 2013, Charles was an assistant managing editor at Dow Jones Newswires, the Wall Street Journal’s real-time financial news and analysis division, where he oversaw its bureaus in Latin America as well as the New York–based emerging markets group. He had previously served as a senior writer in the emerging markets group, bureau chief in Venezuela, and staff reporter in Malaysia.

Charles earned BA degrees from the University of Colorado at Boulder and an MA from the Instituto Universitario de Desarrollo y Cooperación at the Universidad Complutense in Madrid, Spain. He was a Peace Corps volunteer in Mali.

Danan Kirby is a portfolio specialist for Thornburg Investment Management. He works with Thornburg’s investment team and serves as a liaison for the team and key investment decision makers, communicating process and results of the firm’s investment strategies. Danan joined Thornburg in 2016.

Prior to Thornburg, Danan served as portfolio manager for the Strategic Growth Bancorp family of banks, managing various strategies for institutions and individual investors. Before that, he was a financial institution specialist with the FDIC. He is also a veteran of the U.S. Army. Danan graduated summa cum laude from the University of New Mexico’s Anderson School of Management with a BBA, concentrating in finance.

Charles Roth is global markets editor for Thornburg Investment Management. Prior to joining Thornburg in 2013, Charles was an assistant managing editor at Dow Jones Newswires, the Wall Street Journal’s real-time financial news and analysis division, where he oversaw its bureaus in Latin America as well as the New York–based emerging markets group. He had previously served as a senior writer in the emerging markets group, bureau chief in Venezuela, and staff reporter in Malaysia.

Charles earned BA degrees from the University of Colorado at Boulder and an MA from the Instituto Universitario de Desarrollo y Cooperación at the Universidad Complutense in Madrid, Spain. He was a Peace Corps volunteer in Mali.

Charles Roth is global markets editor for Thornburg Investment Management. Prior to joining Thornburg in 2013, Charles was an assistant managing editor at Dow Jones Newswires, the Wall Street Journal’s real-time financial news and analysis division, where he oversaw its bureaus in Latin America as well as the New York–based emerging markets group. He had previously served as a senior writer in the emerging markets group, bureau chief in Venezuela, and staff reporter in Malaysia.

Charles earned BA degrees from the University of Colorado at Boulder and an MA from the Instituto Universitario de Desarrollo y Cooperación at the Universidad Complutense in Madrid, Spain. He was a Peace Corps volunteer in Mali.

Josh Rubin is a client portfolio manager for Thornburg Investment Management. He works with Thornburg’s investment team, serving as a liaison for the team and key investment decision makers and communicating process and results of the firm’s investment strategies. He joined Thornburg in 2017.

Before joining Thornburg, Josh worked on the global equity investment team at Driehaus Capital Management in Chicago where he held several roles, including portfolio manager of the global equity strategy, portfolio manager of the U.S. large-cap and U.S. mid-cap equity strategies, and senior analyst covering emerging markets. Josh also spent over seven years at Marsico Capital Management in Denver, where he was a co-portfolio manager of the emerging markets fund and a senior analyst covering global companies across sectors. He began his career in finance as an investment banker in the fixed income division at George K. Baum & Company in Denver.

Josh holds a BSFS in international politics from the Walsh School of Foreign Service at Georgetown University.

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Danan Kirby is a portfolio specialist for Thornburg Investment Management. He works with Thornburg’s investment team and serves as a liaison for the team and key investment decision makers, communicating process and results of the firm’s investment strategies. Danan joined Thornburg in 2016.

Prior to Thornburg, Danan served as portfolio manager for the Strategic Growth Bancorp family of banks, managing various strategies for institutions and individual investors. Before that, he was a financial institution specialist with the FDIC. He is also a veteran of the U.S. Army. Danan graduated summa cum laude from the University of New Mexico’s Anderson School of Management with a BBA, concentrating in finance.

Stephen Jimenez is a client portfolio manager for Thornburg Investment Management. He focuses on Thornburg’s liquid alternative strategy and serves as a liaison between the investment team and clients.

Prior to joining Thornburg, Stephen was a salesperson at III Capital Management, a $4 billion hedge fund management company focused on rates and credit strategies. He also held various positions in the alternative asset management industry, including Coast Investment Management, a $7 billion fund of hedge funds. His roles included global product specialist and hedge fund analyst, focused on fixed income relative value strategies. Earlier in his career he was a U.S. Treasuries market maker and arbitrageur at major Wall Street firms, including Bank of America and UBS.

Stephen attended the University of Washington, where he graduated with a BA in economics. He is currently registered with FINRA with a Series 7 and 66.

Charles Roth is global markets editor for Thornburg Investment Management. Prior to joining Thornburg in 2013, Charles was an assistant managing editor at Dow Jones Newswires, the Wall Street Journal’s real-time financial news and analysis division, where he oversaw its bureaus in Latin America as well as the New York–based emerging markets group. He had previously served as a senior writer in the emerging markets group, bureau chief in Venezuela, and staff reporter in Malaysia.

Charles earned BA degrees from the University of Colorado at Boulder and an MA from the Instituto Universitario de Desarrollo y Cooperación at the Universidad Complutense in Madrid, Spain. He was a Peace Corps volunteer in Mali.

Charlie Wilson is portfolio manager for Thornburg Investment Management. He joined the firm in 2012 as ­associate portfolio ­manager and was promoted to portfolio manager in 2014.

Charlie earned a BS in geology from the University of Arizona in Tucson and a PhD in geophysics from the University of Colorado in Boulder. Prior to joining Thornburg, Charlie served as co-portfolio manager for Marsico Capital Management in Denver, Colorado. He was responsible for portfolio investments across multiple strategies and geographies, with specialization in materials, energy, technology, and payments sectors.

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